Thousands extra traders sue Hargreaves Lansdown over Woodford collapse | USAEMALL.com

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More than 5,000 people who invested in Neil Woodford’s collapsed equity fund are suing Hargreaves Lansdown, claiming the UK’s largest investment site continued to recommend the product even as it ran into trouble.

Claims firm RGL Management said the number of people taking part in a group High Court claim against Hargreaves Lansdown had nearly doubled over the past two years. It added that the average individual claim, including interest, was about £20,000.

The final number of claimants is expected to be larger, with RGL planning to file on behalf of more Hargreaves Lansdown customers next year.

Hargreaves Lansdown declined to comment. It previously rejected all the claims made by RGL when it filed for the first set of claimants in 2022 “for lack of a substantive basis of claim”.

Hargreaves Lansdown is the UK’s largest seller of retail investment products and promoted Woodford’s flagship UK Equity Income Fund from when he set up his own business in 2014.

However, the fund collapsed in 2019 after investors rushed to try to withdraw their money because of the poor performance of its shareholdings and private company investments.

The fund was frozen as a result. Nearly 300,000 people had invested in it through Hargreaves Lansdown, accounting for £1.6bn of the fund’s total £3.7bn.

RGL said the claim was for “investor losses sustained as a result of Hargreaves Lansdown’s conduct in continuing to recommend [the fund] right up to the day of its highly publicised collapse, despite Hargreaves Lansdown being aware of the fund’s long-standing portfolio diversification and liquidity issues”.

The firm said claimants were seeking the return of the money they lost, as well as damages for the missed opportunity of generating returns by investing elsewhere. It is working with law firm Wallace LLP.

RGL said on its website that if the claim is successful, the “amount to be deducted from gross proceeds . . . by the RGL Group will be 25 per cent including VAT”, noting that this includes legal fees among other costs.

Michael Green, director at RGL Management, said that “adding thousands more claimants . . . represents another step closer to holding Hargreaves Lansdown to account for its conduct” in relation to the Woodford Equity Income fund. RGL filed to the High Court on behalf of the new claimants on Friday.

Woodford’s fund administrator, Link Fund Solutions, reached a settlement agreement with the Financial Conduct Authority last year over its role in the fund’s collapse.

As part of the agreement, LFS has provided redress to affected investors through a compensation scheme worth up to £230mn. As a result, LFS avoided a £50mn fine from the watchdog.